TORONTO - The Toronto stock market finished slightly higher Friday, led by energy sector gains as oil prices rose for a second day.

The S&P/TSX composite index added 44.01 points to 10,977.97 and left the TSX up 146.79 points or 1.35 per cent on the week in the wake of solid earnings reports from most of the big banks.

But the financial sector fell 1.11 per cent Friday as Scotiabank (TSX:BNS) reported third-quarter profit declined to $931 million or 87 cents a share from a year-earlier $1.01 billion despite rising revenue. Its shares fell $1.71 to $46.40.

Although the earnings were three cents a share higher than analysts had predicted, expectations had been raised over the course of the week by much better than expected results from Bank of Montreal (TSX:BMO), Royal Bank of Canada (TSX:RY), Toronto-Dominion (TSX:TD) and National Bank of Canada (TSX:NA).

John Johnston, chief strategist at the Harbour Group at RBC Dominion Securities, observed that the financial sector had seen a strong week, gaining almost four per cent since last Friday's close.

"And you're seeing some lightening up here," Johnston said. "The bank index has more than doubled since late February so you're getting into some profit-taking," Johnston said.

Scotiabank's performance was dragged down by loan loss provisions that jumped to $554 million from $159 million a year ago.

Toronto's energy sector moved 1.2 per cent higher as the October crude contract on the New York Mercantile Exchange gained 25 cents to US$72.74 a barrel. Prices have been volatile this week as traders try to gauge demand prospects. On the TSX, EnCana Corp. (TSX:ECA) rose $1.36 to C$58.45.

The Canadian dollar was down 0.53 of a cent to 91.58 cents US after Statistics Canada said Canada's current account deficit ballooned to a record $11.2 billion in the second quarter as the country recorded its first quarterly shortfall on trade in goods in more than three decades. During the quarter, exports in goods fell $9.3 billion, outpacing the $6.8-billion decline in imports.

The dollar ended the week down 0.85 cents US after the Bank of Canada warned it would not hesitate to intervene to block the currency's recent sharp rise, which the central bank has warned could derail an economic recovery.

The TSX Venture Exchange was 6.56 points higher to 1,188.71.

New York markets were mixed as consumer spending data met expectations and investors took in good news from the tech sector.

The Dow Jones industrial average lost 36.43 points to 9,544.2 on Friday, but was up 38.24 points on the week. The Commerce Department said consumer spending rose 0.2 per cent in July with help from the popular Cash for Clunkers program, matching economists' expectations. But personal incomes, the fuel for future spending increases, were unchanged last month, a weaker showing than the expected 0.2 per cent gain.

The Nasdaq composite index inched up 1.04 points to 2,028.77 after computer maker Dell Inc. reported better-than-expected results for its May-through-July quarter, even as profits fell 23 per cent from a year ago. While sales continued to fall because of reduced spending by consumers and businesses, Dell said it has seen signs of improvement and its shares rose 28 cents to US$15.93.

And Intel Corp. raised its third-quarter revenue forecast above Wall Street's expectations Friday, citing strong demand for its chips and giving another signal that business is improving for one of the world's biggest technology companies. Its shares ran up 78 cents to US$20.25.

The S&P 500 index declined 2.05 points to 1,028.93.

In Toronto, the gold sector added 1.6 per cent as the December bullion contract rose $11.50 to US$958.80. Goldcorp Inc. (TSX:G) was ahead $1.01 to $40.48.

Telecoms were also supportive. Rogers Communications (TSX:RCI.B) gained 90 cents to $30.24.

Consumer staples were also strong as dairy company Saputo Inc. (TSX:SAP) ran ahead $1.44 to $28.

In other corporate news, power generator TransAlta Corp. (TSX:TA) extended Thursday its hostile offer for Canadian Hydro Developers Inc. (TSX:KHD) by two weeks. TransAlta's $4.55-per-share offer for the Calgary-based green energy producer was to have expired Thursday, but will now be open until Sept. 11 unless withdrawn or extended again. TransAlta shares moved down 38 cents to $21.40 while Canadian Hydro Developers was off three cents to $5.09.

And drugmaker Patheon Inc.(TSX:PTI) said it may go ahead with a bid by Swiss-based Lonza Group AG to acquire all outstanding Patheon shares with or without the approval of majority shareholder JLL Patheon Holdings LLC. Patheon has been battling a hostile takeover bid by JLL for months, saying it is inadequate. Patheon shares lost three cents to $3.